This US Dollar report will address the factors that are likely to affect exchange rates in the short term if you are buying abroad or making a currency transfer. The table below shows the difference in USD you would have achieved when buying £200,000 over the past month.
|Currency Pair||% Change||Difference on £200,000|
The USD has recently gained in value as GBPUSD buyers have lost out by nearly 1.5 cents this week, losing clients $1,500 on every £100,000 purchase. This recent run of form for the US has been again down to the changing forecasts on the potential of a US interest rate rise later this year. This speculation continues to change dependant on economic and political events and has an almost immediate impact on the value of the USD. It has also been impacted by the election pledges of President Trump to bring through radical change to the tax and spending policies in the world largest economy. In reality however President Trump has really struggled to pass these policies through Congress. To such a degree that the International Monetary Fund (IMF) cited it as the reason why they recently cut their US growth forecasts for 2017 to 2.1% from 2.3%.
There are a number of economic releases from the US this week to keep an active eye on.
US FOMC minutes were released yesterday and everyone was looking for hints from the FED as to when the $4.5 trillion balance sheet will be reduced. After raising interest rates last month, Janet Yellen stated that the process could begin ‘within months’. This was seen as a delay tactic which pushed back the expected timeframes which weakened the dollar making it cheaper to buy.
Later today the US releases Trade Balance figures which are also expected to show a fall in the difference between exports and imports. Then also Non-Manufacturing PMI is expected to show a fall. All of this potentially would actually result in further USD weakness meaning that anyone with USD to buy may wish to trade later today.
Friday set to be the busiest day for USD clients. We have a host of data including what is widely considered to be the most important data release of the month, US non-farm payrolls. Also released is an update on the employment levels in the US including average earnings and overall unemployment level. This would normally be enough to result in wide swings for the GBPUSD pairing but we also have the G20 meeting taking place with the official first meeting between Putin and Trump on the side-lines of the G20 summit.
Everyone is well aware of how outspoken and ‘unconventional’ President Trump has been since entering the White House. So this event is almost certain to cause some fireworks that could easily impact the value of buying anything with USD in the near future.
For more information on how future data releases could affect your USD transfer, call our trading floor on 01494 725 353 or email me here.
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